Correlation Between International Game and Smart Share
Can any of the company-specific risk be diversified away by investing in both International Game and Smart Share at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining International Game and Smart Share into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Game Technology and Smart Share Global, you can compare the effects of market volatilities on International Game and Smart Share and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in International Game with a short position of Smart Share. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Game and Smart Share.
Diversification Opportunities for International Game and Smart Share
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between International and Smart is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding International Game Technology and Smart Share Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smart Share Global and International Game is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on International Game Technology are associated (or correlated) with Smart Share. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smart Share Global has no effect on the direction of International Game i.e., International Game and Smart Share go up and down completely randomly.
Pair Corralation between International Game and Smart Share
Considering the 90-day investment horizon International Game Technology is expected to under-perform the Smart Share. But the stock apears to be less risky and, when comparing its historical volatility, International Game Technology is 1.4 times less risky than Smart Share. The stock trades about -0.24 of its potential returns per unit of risk. The Smart Share Global is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 75.00 in Smart Share Global on August 27, 2024 and sell it today you would lose (6.00) from holding Smart Share Global or give up 8.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Game Technology vs. Smart Share Global
Performance |
| Timeline |
| International Game |
| Smart Share Global |
International Game and Smart Share Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Game and Smart Share
The main advantage of trading using opposite International Game and Smart Share positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Game position performs unexpectedly, Smart Share can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Smart Share will offset losses from the drop in Smart Share's long position.| International Game vs. Accel Entertainment | International Game vs. PlayAGS | International Game vs. Everi Holdings | International Game vs. Light Wonder |
| Smart Share vs. Frontdoor | Smart Share vs. Bright Horizons Family | Smart Share vs. Mister Car Wash | Smart Share vs. Carriage Services |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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